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Last Updated : Aug 10, 2015 03:37 PM IST | Source: CNBC-TV18

Need drastic change in steel sector to maintain PAT: IFGL

In an interview to CNBC-TV18, Pradeep Bajoria, Managing Director, IFGL Refractories shares his views on the company's Q1 numbers.

In an interview to CNBC-TV18, Pradeep Bajoria, Managing Director, IFGL Refractories shares his views on the company's Q1 numbers.

Below is the transcript of Pradeep Bajoria's interview with Ekta Batra & Mangalam Maloo on CNBC-TV18.

Ekta: Can you tell us what led to this downtick of nine odd percent in terms of your total income this quarter?


A: Keeping in mind the current state of the steel industry, we have done reasonably well. The steel industry worldwide is suffering from the cheap exports from China. You said about the margins, our revenues have dropped about 10 percent compared to the last quarter but if you see, our net profits have improved from 4.3 percent to 8.2 percent in the last quarter. That is from Rs 8.4 crore it has gone up to Rs 15.2 crore, so we are taking effective steps to take action to fight against the state of the steel industry today.

In America, our expansion has gone through and we have started getting orders from integrated steel plants plants, Our Kandla plant in Gujarat, this year is doing much better. We have been able to arrest the rejections which we have been having, so now we are going through with our expansion which will take about a year’s time and in one year’s time we would be doubling our capacity in Kandla.

We have introduced a new product in our German plant Hofmann, the trial production of that has also started. So, we are taking action to counteract the current state of the steel industry.

Mangalam: Last time you spoke to us, you did indicate that your FY16 topline will grow close to 15 percent but with topline in the first quarter coming lower by about 10 percent, do you still maintain that guidance and secondly what is-you spoke about the orders you are getting from America, so what is the current order book of the company?

A: Keeping in mind the current state of steel industry, to predict what will really happen or we will achieve our topline growth or not but we are definitely trying our best to maintain the profitability, there has to be a drastic change in the steel industry.

The other growth point in our industry would be if we are able to do a meaningful acquisition which we are actively pursuing. There is nothing major to say which is concrete but the next step up for the company would be on those lines.

Ekta: You have a diversified presence internationally; India is only 22 percent of your revenue. Because of the dumping that is happening at this point in time, do you think that just to mitigate the risk, you might increase you exposure in the international operations, also tying in with the fact that you have just finished your capex in US?

A: The world steel industry has been on the downtrend for a very longtime, so it is time now that it turns around and we want to take advantage of, there is lot of scope of expanding overseas in a matured market like say even in Latin America or America, there is scope, so we are actively looking at that.

Ekta: How are you looking at it? Is it going to be inorganic, organic?

A: The main thing would be inorganic; we are looking for new products with high technology and profitability companies and to certain extent organic also.

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First Published on Aug 10, 2015 03:37 pm
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